Developing an Investment Policy Statement

The first step in an advisory relationship with North Capital is to determine your objectives, constraints and any special circumstances that should be considered in formulating an investment plan. For individuals, this includes a comprehensive financial assessment and portfolio risk evaluation, determination of education savings and retirement goals, and strategic tax planning. For institutions, we will work with your Board and staff to delineate your investment objectives, highlight conflicting goals, and develop policies and strategies that are appropriate for your organization. This process culminates in the creation of an Investment Policy Statement that integrates this information and sets forth an action plan that is appropriate for your objectives.

Portfolio Construction

After the Investment Policy Statement has been agreed upon, North Capital will begin to develop an implementation plan that allocates your investment portfolio appropriately. The Portfolio Construction process bridges the planning phase and the implementation phase and is designed to highlight risks and constraints that may have been overlooked during the development of the Investment Policy Statement. In consultation with you, your advisor will develop an asset allocation proposal that balances your investment objectives and constraints. At this stage of the process, the asset allocation proposal will reference investment styles and strategies, not specific securities, funds or managers.

Executing the Asset Allocation Plan

During the implementation phase, North Capital will recommend specific funds, managers, securities and other financial instruments to effectively implement your asset allocation plan. The execution strategy will depend upon the specific asset allocation and on tax, cost, liquidity and other considerations that have been highlighted in the Investment Policy Statement. For example, certain managers and funds may require high minimum investments, or may provide for fee discounts at certain investment levels. Other investments, such as financial futures, may not be appropriate for certain investors. North Capital will work closely and interactively with you to ensure appropriate diversification and execution in a timely, efficient and cost-effective manner.

Monitoring and Rebalancing

Ongoing monitoring and reporting commence with the implementation of your portfolio investment plan. In addition to ongoing due diligence of investment strategies, managers and funds, we will keep you informed of progress toward your investment objectives through conference calls, meetings and comprehensive quarterly portfolio reports. We provide risk reports that include exposure reports, value-at-risk (VaR) analysis, and stress testing. Portfolios are generally rebalanced on an ongoing basis as necessary and appropriate, depending on market conditions and your particular circumstances and after consideration of taxes and transaction costs. For institutional clients we offer formal, semi-annual portfolio reviews and rebalancing schedules and will accommodate the scheduled meetings of your investment committee or Board of Directors. Portfolio account statements are produced monthly by our custodians and also are available online. Electronic files with tax lot information and transaction records can be provided to you or your tax preparer upon request.